Image: Jitendra Parihar (Thomson Reuters Foundation)/Flickr
Canadian pension fund Ontario Municipal Employees’ Retirement System (OMERS) on July 31 announced that it is mulling to purchase a 19.4 percent stake in NYSE-listed Azure Power Global Ltd for $219 million. Omers will purchase the stake from World Bank’s private-sector development arm International Finance Corporation (IFC) and IFC GIF Investment Co.
"This agreement to invest in Azure Power demonstrates OMERS strong global interest in high- quality renewable power and energy transition assets, as well as our interest in India as an investment destination and Asia-Pacific more broadly," LiveMint quoted OMERS Infrastructure's executive vice president Annesley Wallace as saying.
Apart from OMERS, other Canadian pension funds investors in India are Canada Pension Plan Investment Board (CPPIB), Caisse de dépôt et placement du Québec (CDPQ) and Brookfield Asset Management.
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Given that the markets in India have matured from the early risk stage, the interests of Canadian pension funds in clean energy has grown over a period of time. This also taking place amid a growing focus on environmental, social and governance (ESG) investing.
"The closing of this transaction would mark our second direct infrastructure investment in India, following our 2019 investment in the IndInfravit toll road platform," the business daily quoted OMERS Infrastructure's MD Prateek Maheshwari as saying.
Prior to this announcement, OMERS announced an investment of $121 million for a 22.4 percent stake in IndInfravit Trust. With that, it marked its first infrastructure deal in India. The transaction is expected to close in early August.
Currently, India is running the world’s largest clean energy programme to achieve 175 GW of renewable capacity, which includes 100GW of solar power by 2022. By 2030, India's power requirement would be 817GW, which is over half of which would be clean energy, and 280GW would be from solar energy alone, according to Central Electricity Authority.
Recently, Thailand’s state owned energy major PTT Group acquired Avaada Energy Pvt. Ltd's 41.6 percent stake for around $454 million.